Maximizing Benefits Of Managed Services Through Source Procurement
Source To Procure
In the modern corporate landscape, procuring services externally to fulfill specialized roles and duties has become common practice among many corporations. This shift to more cost-efficient outsourcing model has enabled organizations to realize greater levels of efficiency in operations, as specialized service providers who have expertise in specific areas can be easily identified and leveraged without the need to depend on in-house resources. One particular area of expertise that often necessitates external procurement of services is managed services.
Managed services refer to the practice of outsourcing various elements of it iservices to specialized providers who are responsible for the maintenance and monitoring of all components required to run an organizations IT operations. These services span across essential components of the organizations technology suite such as networking, software and hardware infrastructure, cloud, applications and customer or enterprise data, among others. The prominent advantages that managed service providers (MSPs) bring to the table stem from their expertise in handling all components of IT operations and resultant economies of scale that organizations benefit from.
Selecting the correct Managed Service Provider (MSP) is critical decision for any organization as it is the first step to securing mutually beneficial service relationship and capitalizing on the potential value of the vendor selection. Since managing services and delivering business value are two very pivotal levers to the prosperity of business, here is step-by-step guide on how to properly source and procure managed services in order to establish and maintain successful working relationship with an MSP.
Step – Identifying The Needs Of The Business
The first step towards procuring managed services and finding the right MSP is to identify and evaluate the needs of the organization in terms of its desired services. Establishing these requirements will not just help to assess the capability of the MSP, but also to understand the scope of the services that need to be provided and the expected outcomes.
This entails considering the current state of operations, the future-readiness of operations, the level of support that might be needed in different areas, the cost of training and onboarding personnel, the budget considerations and accumulated knowledge of staff. In addition to these determinations, requirements should also be unclearly linked to the organizations strategic objectives in order to formulate the expected value of any services procured. This holistic review of the organizations needs and requirements enables the identification of the best-suited MSP for the organization.
Step – Conduct Market Analysis
Once the preliminary review of the organizational requirements is done, it is time to dive further into the possibility of potential service providers. This involves conducting extensive research of the market, looking for qualified and reliable vendors that are able to meet the required technical and business objectives. While conducting due diligence on prospective MSPs, it is also important to review their track-record of successful projects, their longevity in the industry, customer reviews, cultural alignment and cost effectiveness. Considerable effort should be placed on reviewing existing partnership agreements to see what specific obligations need to be fulfilled by the respective companies.
Step – Design Competitive Selection Process
Once the requirements are in place and the list of potential vendors are narrowed down, it is time to begin the competitive selection process. This involves formulating an RFP (Request For Proposal) that can be sent out to the potential vendors, outlining all the requirements from the organization. An effective RFP should provide detailed overview of the services requested, include probabilities for vendor selection and completion, timelines for the process and metrics for measuring success outcomes. An effective RFP also puts forth clear expectations for the managed service provider in terms of the services to be agreed upon and expected levels of support.
Step – Request And Evaluate Proposals
Once the RFPs have been sent out to potential vendors, it is imperative to review the proposals received and evaluate the responses. Here again, it is important to consider all criteria mentioned during the formulation of the RFP as these form the backbone of the construction process. The evaluation should also include detailed comparison of the requested services offered by the MSPs to assess the cost-efficiency, scalability and performance of each provider in comparison with each other. The evaluation should also consider the benefits offered by the respective MSPs which might go above and beyond the expected criteria in terms of consulting services leading to operational improvements, or ability to contribute to strategic objectives, or added flexibility in incorporating advanced technology.
Step – Conduct Negotiations
Once the selection process is complete, the process enters the negotiation phase, wherein the MSP and the organization agree on the final terms of the services agreement to be provided, set execution timelines and decide on metrics for measuring the success of the project. During this phase, it is important to ensure that the selected MSP has the required commercial capability and legal instruments (contracts, documentation) to fulfill the contractual agreement and deliver the desired services. All terms and conditions should be clarified in the contract in order to avoid potential negotiation conflict during the implementation and execution stages.
Step – Monitor Execution and Access the Impact
The final step in the procurement process is to ensure that the managed services delivered by the MSP are in-line with the expectations set-out in the original agreement. It is important to have periodic check-ins to review the services offered by the MSP, monitor current operations and review the various performance objectives of the agreement. Furthermore, it is also essential to evaluate the overall impact of the managed services delivered by the MSP over period of time in order to assess and reassess the commercial gains realized from the process.
These step-by-step guidelines for source procurement provide an effective and comprehensive approach for organizations to ensure that the procurement of managed services is as beneficial as possible. The key is to identify the objectives and requirements of the organization, utilize competitive selection process to identify and partner with the right MSP and closely monitor the execution of the services to measure their overall impact to the business. In essence, the source procurement process provides the primary mechanism to leveraged the potential benefits of managed services in an organized and efficient manner.
